Car Sales soar to highest level since 2003 ñ but what does 2015 have in store for the motor industry?
The trend of monthly growth in the UK car industry is poised to continue into the New Year, with December marking the 34th consecutive month in which car sales have increased, and leading automobile trade associations are billing the industryís current sales performance as the best in a decade.
Figures released by the Society of Motor Manufacturers and Traders (SNMT) revealed a 9.3% annual increase in the number of new car registrations for 2014, with just under 2.48m motors exchanging hands across the UK. This figure does fall short of the record car retail high in 2003 when 2.6m cars were sold ñ the early parts of the millennium were an economically rosy time for the UK compared with other countries as many major European powers slipped into recession.
Mike Hawes, chief executive of SNMT said: ìUK new car registrations returned to pre-recession levels in 2014, as pent-up demand from the recession years combined with confidence in the economy saw consumer demand for the latest models grow consistently and strongly.î
Underlying reasons for heightened car demand over the past year, and indeed the two preceding it, include consumers taking a more relaxed stance towards parting with large sums of money on luxury purchases in light of a growing economy and an explosion of discounted financial packages circulating on the market that have proved exceptionally popular among buyers.
Yet, Mr Hawes has forecasted that the next year will yield a far slower rate of sales growth in the car industry, pointing to buyer uncertainty in the build-up to a potential change of residence at Downing Street, and the uncertainty stemming from a rise in interest rates, as justification for his projection.
This said, last year SNMT predicted that cars would sell at around a fifth of the rate they ended up going at, so car sales growth continuing to outstrip expectations into 2015 isnít unconceivable. At present, the UKíS car industry turns over £64bn a year, having gathered steam over the past couple of years.
Increase in ultra-low emission models
There has been a particularly noticeable increase in the number of new ultra-low emission models on the roads, as demand for hybrid & electric cars increased by 58% in 2014 with over 51,000 cars sold.
ìThe year was particularly strong for alternatively fuelled vehicles as increased choice, coupled with a growing desire for reduced costs and greater efficiency, resulted in a quadrupling of plug-in car registrations over 2013,î explained SMMT chief executive Mike Hawes.
All of the UKís major car brands now have market an ultra-low emission model due to their exponentially increasing popularity. Sales have jumped from 3,500 odd to over £14,000 in the 12 months to last December, indicating the Government remains on track to fulfil its goal of having every new car sold in 2040 to be an ultra-low emission model.
Nick Clegg, deputy prime minister, said: ìThe extremely low running costs of these cars help drivers save money. Electric cars are one of the most promising of our green industries and we want to secure the UKís position as a global leader in both the production and adoption of these vehicles.î
But, with oil prices continuing to nosedive, consumers could be discouraged from the superior value of alternatively fuelled cars as their discounted older models become just as cost-effective to fuel.
However, Mr Hawes warned policymakers to abstain from interfering with the automobile industry too much, despite falling oil prices.
ìWhoever wins the next election they donít introduce policies which imperil the contribution the auto industry makes,î he said. ìItís the type of sector the country needs, it is export led, it delivers efficiency improvements, employment training and is increasing investment in innovation.
ìThe auto industry isnít broken so donít fix it.î